The Nigerian National Petroleum Company Ltd on Wednesday said that Nigeria will earn over $6bn through royalties and taxes from the implementation of the $1.4bn external project finance agreement.
The Chief Finance Officer of the NNPC Ltd, Mr Umar Ajiya who disclosed this during an interview on Arise TV monitored by THE WHISTLER, said the revenue will be earned within 20 years of the implementation of the project.
The deal which was sealed in London is jointly arranged by Standard Chartered Bank UK and United Bank for Africa for the Northern Hydrocarbon Funding Limited.
The agreement is strategic because it was sealed under the NNPC Limited/Chevron Nigeria Limited Joint Venture.
Code-named the Project Panther
Externally Financed Development Drilling Program, (2022 – 2026), the deal will ensure that the Hydrocarbon project is funded through external financing from 16 lenders across 3 continents.
Shedding more light on the financing agreement, Ajiya said the loan facility is a testament of the faith which financial institutions have in the Petroleum Industry Act.
The Corporate Affairs Commission had on September 21 last year completed the incorporation of the NNPC Ltd in accordance with the provisions of the Petroleum Industry Act 2021.
The PIA was signed into law by President Muhammadu Buhari on 16th August, 2021, following its passage by the National Assembly in July of the same year.
Ajiya said the project is also expected to increase production of the NNPCL/CNL Joint Venture, adding that the scope includes 37
Development Wells made up of 31 Oil Producers, one Gas Well and five Water Injectors spread across ten NNPCL/CNL Joint Venture fields from
2022 to 2026
The project also has a world-class resource base and will deliver 97
million barrels of oil equivalent per day of gas and 166 MMBO of oil making a total of 263 MMBOE.
He said, “This is in line with the recent reforms in the NNPC brought about by the PIA which was signed into law late last year by the President.
“This has rekindled and also raised the appetite of international lending communities to lend to NNPC and its partners for fossil fuel development.
“This $1.4bn is aimed at utilization of drilling of 37 development wells, oil and gas. As a consequence, all the gas that will come out of this development will be diverted to the domestic market which goes in line with our energy transition plan.
“At the same time, this also goes to reduce the carbon footprints of NNPC/Chevron joint venture because almost all existing facilities will be utilized in transporting and processing of these hydro-carbon.
“Now the totality of these is that in terms if taxes and royalties, the Nigerian state will earn about $6bn for the entire 20 years of the field.”
He explained further that the pricing of the loan is competitive, adding that the project is well profitable enough to repay the facility.
Ajiya states further that the Project Panther will also spread across 10 fields in OMLs
49, 90 and 95 and the production will reduce overall NNPCL/CNL Joint Venture carbon intensity through significant utilization of existing infrastructure.
Through the Project Panther deal, he said all produced gas will be routed to meet domestic supply obligation, thereby supporting Nigeria’s energy transition agenda through
increased gas production.
He said the deal has nothing to do with the Kolmani oil drilling in the North because the project to be executed are all based in Delta State.
Ajiya said, “The project also aligns with the Environmental, Social and Governance (ESG) goals of the NNPCL/CNL Joint Venture.
“This will be in OMLs 49, 90 and 95 and all of them are actually in Delta State and they are offshore and does not have anything to do with the Kolmani oil find.
“The deal is very competitive in terms of pricing, involving 16 lenders in three continents and we can say that indeed, time has come for a limited liability company together with its partner is able to attract foreign direct investments into the country for fossil fuel development.”
The expected peak rate of the project is put at 85 MMSCFD of gas by 2026 and 40 MBPD of oil by 2025 for the long-term benefit of the NNPC Limited and Chevron Nigeria Limited.